Markets Remain Cautious As Equities Slip

AUD

The AUD opens mixed against the majors this morning, largely due to risk sentiment and uncertainty in the market.  Asian equities followed Wall St.’s lead to close lower: The Hang Seng -1.9%, the Nikkei -1.8%, and the Shenzhen -1.6%. The ASX shed -1.4% with IT the hardest hit, down -4.4%. Australia's economic calendar in the week ahead features the Monetary Policy Meeting Minutes on Tuesday and the Wage Price Index q/q on Wednesday. The futures market has the RBA expected to hold through until quarter 1 of 2026, and slightly more than a 50% chance of a cut toward the end of Q2 2026. This week's reports are unlikely to have significant impact on expectations. Last Friday we saw from the Chinese data that momentum is fading heading into the end of the year, Industrial Production y/y came in 0.6% below expectations at 4.9%, and Fixed Asset Investment ytd/y retracted by -1.7%.
 

USD

AUDUSD opens flat at 0.6533 this morning, largely due to uncertainty around the FEDs rate cut decision which is currently sitting at 50% odds. Wall St ended the week mixed as the Bureau of Labour Statistics provided an updated data release schedule following the reopening of the U.S. Government. The Dow Jones closed -0.7%, the S&P 500 -0.1%, and the Nasdaq +0.1%. U.S. 10-year yields climbed to 4.14%, and Brent Crude gained 2% to close at $64.31 a barrel. This week the backlog of economic data will start to release, and the long-awaited September jobs report (originally due out October 3) will publish this Friday. On Thursday the FOMC Meeting Minutes will be released which will provide an in-depth insight into the economic and financial conditions that influenced their vote on where to set interest rates.
 

EUR

AUDEUR opens flat this morning at 0.5623, after hitting a high of 0.5639 over the weekend. European equities closed in the red with the DAX at -0.7% and the CAC at -0.8%. Last Friday saw a number of European economic data releasing with GDP q/q and Flash Employment Change q/q meeting forecasted results at 0.2% and 0.1% respectively. The Euro Trade Balance was an outlier amongst the data coming in at an $18.7B trade surplus after a year of largely mixed results. Looking ahead to the rest of the week, Wednesday we have Final Core CPI y/y and Friday will have French and German Flash Manufacturing PMI and Flash Services PMI.
 

GBP

AUDGBP opens up at 0.4966, trading in a range of 0.4951/0.4983 over the weekend. The FTSE closed at -1.1% following global bearish trends. This week's data will likely impact expectations for the Bank of England meeting next month. In the middle of the week, October CPI will be released. Expectations for monetary policy may also be sensitive to retail sales that will be reported at the end of the week. Friday will also see UK Flash Manufacturing/Services PMI data.
 

NZD

AUDNZD opens down at 1.1506. This morning BusinessNZ Services Index released coming in at 48.3, which marks 8 months in a row of contraction. FPI m/m also released this morning, which monitors the change in price of food and services purchased by households, which came in at -0.3%.